Episode #242 – Running THREE Successful REI Businesses with World-Class Operator Justin Dossey, Part 2

You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.

0:39 Hey, guys, welcome back. You're listening to the second part of last week's episode. Let's jump back in. Yeah, so you came into ballpoint, you had, just like I had stopped the story there. Because you just just like go that team you brought in new folks, it sounds like that's we're sort of fit for the culture and the values that you wanted the company to have.

0:59 And they happen to be luckily for me, they happen to be people that worked for me in the previous industry. So I already knew their work ethic, I already knew what they wanted, what their goals were. And then they had kind of got to a similar point that I was at, and started reaching out saying, like, hey, looks like what you're actually doing is a real thing. And it's like an actual business. And I just like something you were hoping would work, you know, do you have room? Or do you need somebody and so that's, that's where we started with getting a couple of our really good reps that some of them still work for us to this day came from that industry.

1:27 That's awesome. So like, when you when you had the team in place? What did everything else kind of fall into place after that? Or what was the next big kind of bottleneck that you need to address in order to grow? Right? Because it really strikes me is? Like you said, you're not offshoring this to the cheapest possible area, right? You guys are doing this with people who are skilled in what they're doing. They're trained like you have, you have a lot invested there. And it's a job that is really reliant, I would imagine on like, load management, right? Like you only have three reps, and you have four call flooded time. You're like, I didn't get to that fourth call, right. So like, after you built the team, did it all fall into place? Or like what was the next series of bottlenecks, you had to work your workers? Yeah.

2:17 Yeah, good question. I mean, once once we had the team in place, the calling aspect or the answering aspect was going very well. Anyone who's listening to this, that was an early adopter of Cole Porter, like 2018 2019 will be able to attest like we had maybe a 70% answer rate, because it was hard we were at, we're kind of at a point where our business is pretty labor intensive, right, we have feel like our p&l is Labor's a huge majority of that not, so we had to get to the point of we could hire enough people to manage the calls, and kind of figuring out the pricing. But for us, like the the next bottleneck that we found, was me, actually. So when you're new as an entrepreneur, you wear a million hats, you do a million different things.

And you might you're, you're gonna be a detriment to yourself. So luck. Lucky for us, like we had kind of got to like, I don't know, maybe 3035 grand a month in revenue, we're positive every single month. And I was making more than, you know, three grand a month at that point. But we're like, how do we, how do we scale past this? How do we get through this, and it was probably when we took our biggest leap of faith ever. And we've still continued to do this. And that was hiring our first coach, that it was 96 grand a year to do that. So it was paid monthly. You as the CEO, for Ryan and I as business owners in general. So this guy, nothing with real estate, nothing with call centers, it was just business in general.

And I remember exactly where I was, I was picking up my son from daycare, and I got a call from Ryan. He's like, Hey, are you ready to go in on go all in on this and spend $7,200 a month? And I was like, What? No, that's like 30% of what we're bringing in right now. Like, what are you talking about? So we've done some research on this guy's name, Scott old furred still follow him to this day. He's doing amazing things now. But we went to our first mastermind ever in Venice Beach, California, with a bunch of like hippy California people that I I was not used to because I'm from the Midwest. And now I love it like, yeah, some great friends that I met there, but it was a little weird at first and shock. Yeah, the big thing that I talked about was like bottles, bottlenecks in your business. And what they provided to us afterwards was a task audit.

And what that did is it allowed me to go in and put in every single thing I was doing on a daily, weekly basis, and assigning the amount of time I was putting into each one of those. What was interesting about this, then is you categorize those based off of dollar per hour generators in that business and what that task is so like bookkeeping, for example, you could assign to an overseas VA for 10 bucks an hour, content creation would be $50 an hour, you know, and you go down to 250 an hour $1,000 An hour based off of what value you're providing to your business. And after looking at this, we're like, I'm wasting 80% of my time by being the person answering all the support emails, all the sales calls, all the sales questions, all the onboarding, like, I was working 6070 hours a week doing all of these individual things, and realizing like, Okay, I'm wasting 80% of my time.

And that's when we started hiring out the most important parts that still needed to be done, but then we could trust someone else to do so like, I think customer support was the first role that we hired. And it was an internal hire, that they're already on the phones, we didn't have a ton of support emails, so they kind of did both. And we gave them a little bit of a pay bump. Second one was sales, that one was mostly commission based at first, and then we kind of grew from there. And once we kind of made these implementations on here and took 30 hours a week out of my time of doing crap, in like a six month period, we went from like 30 grand a month to 90 grand a month in that business by making those changes because I was the person in the way of everything, because everything stopped with me. So if I was sick, if I was on vacation, which I don't think we really took back then. But like if there's anything that was going on, it was always waiting on me. So getting out of those roles as a solopreneur. And actually hiring people to start managing and growing those parts was a huge part. And then also our ads started working at that point, too, because I was another aspect that we learned too.

6:35 Let me let me ask you about training. Because it was like a good pivot moment to talk about this. You guys. It's interesting, like I you know, that we talked to already, you talked about load management that there's certain like technical element of what you're doing right, managing certain amount of in coming calls, understanding how you got to staff, right. So in some ways, you're a staffing company, but in a lot of ways, you're really a training company. Right? Because your whole Yeah, it's the thing that makes Cole Porter's so great. I think the reason you guys compete so well against other, you know, whatever call centers or whatever, is the fact that the people you're bringing in, know, their stuff on real estate. There.

They are not just good on the phone. They are good at the industry there, sir. Right. And one of the challenges I have in my business, is that my business digital marketing, we've got a technical base that people tech usually have if they if I'm bringing them in right to doing some filtering up front. But what I struggle with a lot of times is they get into situations and I'm like, well, there's no way to make an SOP for every possible situation you're ever going to run into. And so at some point, it's like you got to think on your feet. And one of the things I struggle with is like, how do I get people to really think on their feet? Because they'll often make decisions that are like very odd to me.

And I just kind of realized over time, like, what's my business, and I feel free to make a lot of decisions and have a lot of leeway. And I'm used to thinking through things a certain way. And other people don't necessarily feel that. So walk me through how you guys train people, because you must have a really world class training process. Justin, I mean, you're just the bottom line of your business is staffing people with a certain amount of background knowledge. So how do you guys think through that problem? Or what is your process look like?

8:31 Yeah, that's, that's a great question, a lot to unpack there from the training aspects. Because the interesting thing for us too, is we've always been virtual. So like our team is 100%. Virtual always has been it was great during COVID, because we didn't have changed a thing, like, everyone works from home, they have their office, and that's what they do. So for us, the training kind of starts on a foundation level of just like, because I'll be honest, most of the people when they come in, they have very little real estate knowledge from the beginning, mostly what we're looking for is call center experience. Because there's, you have to have a certain amount of thick skin to work in a call center, and be able to not take like angry people personally and things like that.

So that's kind of like our biggest thing that we're looking for is like, Where have you worked and what have you dealt with already, because real estate's not as bad as other industries I've been in, I was a debt collector as well for a year. So like, there's way worse calls to take for sure. But making sure that you know, you can roll with the punches and keep going is a big part of it. But once they get in, we kind of start foundationally of like, what are the terms in real estate? What's a wholesale what's a flip? What is a buy and hold? What are some of the metrics and numbers people look at? And what we do now is there's typically like 10 days to two weeks worth of training, and that's a mixture of zoom calls, documents, recorded live videos, things like that, that they're going through.

And what we do after that is we do continuous training with them for the entire time. They're with us So we have someone on our team who started with us very early on who he is like a full time trainer now, so he'll be on the phones and help out as needed. But his whole goal is setting up calls with each employee every single week for an hour. And just going through like, Hey, here's a call we listen to, what do you think here's something we could have done better. Here's something you did really, really well. Here's some advanced terminology type stuff. But we also do an all hands meeting every single month with our COO, Chris, and our, our team. And on those occasionally we'll bring in an actual client of ours, to just talk about real estate stuff.

So Noah's a guy, Brian's business partner in Indy, that we bring him in occasionally, because he's a he's close to us, we know him and we trust him. And what they kind of do when they come on is they talk about like, what a real estate investor looks for. When someone is taking their calls when they're getting a property when they're taking a call on an inbound lead, what are they looking for? What do they want to know what's the thing is going to be a value to kind of just keep that in the forefront of their mind. And then they're there for q&a as well with our team.

So we'll do that every month. And then we'll probably bring somebody in like once a quarter to kind of do that. But our goal is to like always keep them around real estate investors, real estate, investing, continuing education, things like that. And that goes through multiple different layers of that through those weekly trainings, the monthly trainings, and then the quarterly kind of bringing somebody in whether if it's myself now, Ryan, somebody else that's in our sphere of people that we trust. And now just to kind of come in and give some additional advice, sort of help them think about things a little bit differently.

11:40 So they've got the sort of initial sort of, almost like course that they go through. They've got the weekly check in calls that are always doing an hour with someone who's critiquing their particular work. Yep, you're doing monthlies and you're doing quarterly shred. So you have this like a multi layered Gotcha. The idea of having someone on staff whose job is that who like did that job, but is now a full time trainer is really interesting. I hadn't really thought of that. That way. I kind of do that work in our company, but but I think that's a really powerful idea, right? Even if you're listening to so you're a real estate investor, right?

Even the idea of saying like, Well, hey, if you've got like sort of a senior acquisitions person, having a mentor spends some time with someone who's newer, I think he's a really powerful, systematic way of making that knowledge transfer happen. Well, let's, let's talk a little bit about ballpoint because we haven't mentioned it at all, I know we're coming up on time, I don't want to keep you super long. So I'm ballpoint Mom, I'm good. I got time. So ballpoint marketing.com You're wearing the shirt right now actually, if anybody's watching the video, give people a high level overview we've talked about called Porter, right, which is a call center answering all your calls, making sure that they set you up with appointments with your incoming leads, where does ballpoint fit into this picture?

13:00 So ballpoint is where I spend most of my time now at this point. And that is a direct mail marketing service for real estate investors, real estate agents, we also work in a couple other industries as well. It's not widely advertised, but we do some custom stuff for other industries as well. And our whole thing is improving your response rate on direct mail. So if you've been in real estate investing, or really any business and you've done traditional printed direct mail, the response rates are horrible, like a 10th of a percent or less like the very, very minimal you have to send. I think the first part one of the first people that shocked me with a number was I send out 50,000 pieces of mail a month to get a deal.

And I was like, why? Well, why are you spending so much money to do that? I think it was in Dallas and they were sending like 30 sent postcards. So it's like your cost is still 15 grand, you know, to get a deal, which is extremely high. But we kind of started ballpoint to provide a different way to get higher response rates. And that's using handwriting machines to write the letters out with an actual ballpoint pen. And bringing personalization back into marketing like nowadays, like there's so many ways you can market and most of them can feel pretty impersonal, you know from texting cold calling, direct mail, online ads, like everything in together, a lot of it is automated, which I think is really good and helps businesses grow in a way but adding that personal touch in is like an extra arm to your business, or his what's been really important for us and that we can we try and be as well rounded as possible, right?

Not putting all our eggs in one basket or in one form of marketing. Like we've got a mixture of things that we're doing. And so ballpoint marketing was started, again out of like an internal need to improve our own response rates or Ryan's own response rates rather kind of grew from there were friends were like, Hey, let me let me get in because you're getting really good results. And it just kind of grew from there to now we work with like three to 400 clients a month around the country and do like half a million pieces of mail. Right now I owe per month. And yeah, the whole thing is like if we can get your response rate from a 10th of a percent to three quarters of a percent or higher than 1%, like your ROI on the money you're putting out is it pays dividends long term, then for us, in my own business, it's been very scalable and repeatable. To be able to know like, if I put an X amount of money, I'll typically get X amount of deals back.

15:22 Yeah, I think it's, you know, you said it's scalable. But I mean, I think over the long haul, higher response rates are a massive force multiplier, right? It just is. It adds so much fuel to what you're already doing. Wants find motivated seller leads online, but don't know where to start. Download our FREE motivated seller keyword report today, AdWords nerds have spent over $5 million this year researching the most profitable keywords for finding motivated seller leads. And you can grab these exact keywords when you download our report at www dot AdWords nerds.com/keywords.

16:08 Let me ask about this, because we kind of mentioned this before, but you're going back and forth between these two businesses now, right ballpoint and people are familiar with ballpoints an absolutely massive operation. And you just talked about some of the numbers of kind of like my make a cold sweat breakout. But it's like you know, so in in everybody's stuff is different as well, complexity there. You've got like physical machines versus there's a lot going on, right? You've got call border, which is a lot of people answering phone calls, but they're remote. So you're managing all this stuff. So like, how do you think through the process of managing and running two businesses at the same time and not to businesses? Where it's like, yeah, I'm drop shipping knives from China or whatever. You know, like we were, I was like, Oh, I'm a serial entrepreneur. And they, it's always that it's always like dropshipping. So, for you, how do you manage that process?

And particularly, if you could talk about the two things I'm most curious about? In what ways do you touch the actual employees? Right? So are you dropping in on one on ones? Are you doing like random drop ins or calls or whatever? Or? And then and then to, what numbers are you looking at, on the day to day, week to week, month to month or whatever to know when you need to step in? What it needs attention that thing? So like, what is your process for staying in touch with the business? Hmm,

17:34 good question. That another layer of complexity. I have three businesses now actually. Real estate investment one, that one's real estate investing, but yeah, so the first thing to like start with is buying. There's so many things that go in here, but I look, you're one of the best interviews, interviewers I've ever been on with a podcast. Yeah, I've been on a couple where it's like, well, what about this? What do you do this? What about this? So this is great. I love this.

18:03 This is awesome. The mail? How does it work? Yeah. Yeah, I kid you not? I've been on one just like that. Oh, and how much is postage? And like, I'd rather more conversational like this. This is great. So I think the first thing that has allowed me to do this is having is recognizing what my role is in our business. So like, Ryan and I are very different people. And we see things differently. And we operate differently. If you guys have read traction or rocket fuel, like the integrator and the visionary that's been us, the majority of our time, we're Ryan's the visionary and the integrator. It's building that way. Yeah, as as I've learned and grown, I'm more evolving into a visionary with integrator like processes in there, okay.

And so it's always been like, he starts it, I build it, run it, then we go from there. But what I've been focusing on is staffing out the key roles in my business to where it can run without a lot of intervention from me. So call Porter for example, I spend maybe three hours a week on something like that two to three hours a week, because our COO Chris or our general manager, Chris rather, and our COO Jeremy help run and manage every single thing there on a day to day basis with hiring, training, management firing pretty much everything other than like high level decisions and marketing they take care of. So having a good team in place there has allowed me to step out of that business to focus on ballpoint and we kind of did that forcefully when I took over ballpoint because it was like alright, I have to be here now I'm gonna have to focus on this who can I put in this business to help us do that?

And it's gone through a few people but I think we've got the right people there at this point to help do that. Now ballpoint this is where I am here pretty much every day at this point. But long term goal is to do something similar and still be an owner be involved in it but not have to be on a day to day at spending my time kind of thing? Yeah. And so similar thing like that'll be long term goal is finding and making sure we have the right person who can take over what I do in exchange for maybe me making a little bit less monthly. But quarterly, I'd make more based off of disbursements, things like that, from that growth in that company. So to answer your question, like with team members, we use Slack a lot across all of our companies.

So we're always like posting wins, communicating in Slack talking to our team. And then those monthly all hands meetings at Cole Porter, I try and beyond those as much as I can. But I also do a Monday morning call with our leadership team across both of our companies. The other one is on Tuesdays, where we talk about like high level stuff. Where are we at? How do we do last week? What do we have to do this week? What's our goals? What's our issues doing that, and that's a standing Monday morning at 10am Call with our team. And then the investing business, I do that on Tuesdays, but that I'm able to do that, because I have a business partner who lives in Baton Rouge where we mark it. Again, he runs the leads, he runs the deals.

And then we're there for like coaching, helping find financing and funding, all that kind of communication type stuff. So it allows to kind of like my long term goal is to be more a smaller equity owner in companies to provide insight and help into helping that business grow with what I've learned, but not have to be the person that's there every single day. So it's finding a good operator that can actually run those. And that's the thing that's familiar across all of our companies is we have good operators in them. And even in ballpoint we have a good operator here as well, that is learning more and stuff like that. But making sure that you have the right person that will be able to grow and scale those companies while you are still involved. But maybe not as much long term.

21:48 Yeah. What about and I'm curious, this could be doesn't necessarily need to be like running the business, per se. But what are the numbers that you're the metrics that you feel you need to keep your eye on in terms of running the business at a high level, right? Because a lot of people watch revenue, and it's helpful. Sometimes it's not so helpful. Other times don't have like a set where you're like, This is what I look at, or is it more of a holistic thing of, you know, you're depending on people, not depending on people, but you were at the you are you rely on people to be like, well, here's my sort of part of your universe. And here's what's going on here. How do you?

22:28 Yeah, so there's there's key metrics, we look at an each company because they are a little bit different on what they what they produce what they do. So like ballpoint, for example, we track daily production numbers. So because our one of the biggest problems we had a ballpoint for a long time was long turnaround times. But so we've had to implement and change a lot to really shorten that down to like a three to four day turnaround time now. And so to make sure that we're staying on pace with that is, how many orders came in? How much did we produce?

Are we ahead or behind on that. And we're typically ahead right now on getting stuff out the door quicker than it's coming in, to where I'd rather than be bored for two or three hours, while we're waiting on the next order to be ready, then for us to be two or three days behind. So that's our biggest thing we look at it ballpoint is making sure that we're getting production done as quick as possible. And then we'll look at p&l is on like a monthly basis like what are our percentages? Where's our helmet? Did our ad budget go up? Did it go down like and kind of tweak things based off of what we're seeing? On the call Porter side, what we look at there is answer rates is a really big one, like we're at 99%.

Right now. If you remember, we were at 70 60%, a couple years ago. So being at 99% is huge. But also like making sure we're maximizing our labor usage there as well. Because it's very easy to get bloated on your labor in that business when it's just people based. So tracking that kind of stuff. And then in both of them, we also track like what our sales team is doing, how many calls, how many appointments, how many deals, what revenue did you bring in for the month, and then we give them like monthly goals that they need to be hitting in each one of those businesses. So we kind of try and get it down to a good overview of what we're looking at. Without having to deep dive into every single business every single week. We can kind of look at numbers at a high level and see where things are at.

24:25 Yeah, I love that. I think it's I didn't even think about your turnaround in ballpoint there was like I have a new record have gone down. I will save it for another podcast. I got my last question I have to ask. Sure. Which is I'm curious, particularly with ballpoint. Are you guys curious about or what do you see as the role of AI in that business? Let's say over the next two or three years, is that something you guys are interested in? Is it like it's too early? I don't know. What is your kind of feeling about it?

24:56 That's funny. Someone asked me that like two hours ago. Yeah. was the first time someone had asked me that. So we're with ballpoint, it's a little challenging to figure out where it fits in. And I think part of it that we'll probably see in the next six months or so is like copy creation for direct mail pieces. Coming up with unique stuff, targeting for specific reasons, kind of having that as an option on there. I have personally been using it on the back end of stuff to manage and build reporting that like, like I said, earlier, I barely graduated high school, like I know spreadsheets decently. I know some of this stuff. But like, I was trying to figure out some complex formulas and numbers in Google Sheets.

Jaggi Beatty, is crazy for helping you figure that stuff out. I've learned more in like a week using that for spreadsheets than I have in like two years. It's been crazy. So I see that but I I am interested to see how it pans out on the call Porter side is there's a there's a new integration or new company that's in beta testing right now, that will have like an AI bot, take your calls. Sounds like a person communicates like a person answers questions like a person uses logic reasoning, all that kind of stuff. So I'm sure it's super clunky right now and not very good. But I am curious to see how that evolves over time. Yeah. Because even if it's just like an overnight thing, you know, like, who knows, I think we'll always have people on the phones because it's hard to replace that. But I could see that being implemented long term in a lot of call centers around the world. And I think the while there's a use for it, I think the value of actual humans taking calls and being involved is still going to be there and be of a higher price point based off of that long term.

26:48 There. I was thinking it's actually, in a lot of ways, probably good for the core value proposition of Cole Porter, right. It's like, sort of similar, in some ways, similar to AdWords nerds. And that has been AI ad managers for a long time. Right. And the way we pitch AdWords nerds as I'm like, we don't do any of that person. Yeah. Like, the computer just doesn't, no matter how smart it is, it doesn't get the context the vast majority of the time, right? Yeah. And it

27:20 doesn't, yeah, doesn't feel right. Like, exactly, that's a big part of call porters then building rapport with people in like, you know, if someone inherited a property because a relative passed away, like our team is trained on how to handle that how to have empathy, how to talk with that person, how to, you know, move forward on building the relationship and the rapport with that person where I think a lot of that gets lost, even if you have like, pre scripted responses in AI and stuff like that. Like I, I think there's a lot of really good uses for AI. But I think for us, it's going to be more on the back end of things, right, like, you know, building out features onto the site or managing reporting processes or tracking numbers. Like, I think it's going to be for more that kind of stuff is what I'm seeing in our business.

28:08 Yeah, I'm with you, man. I've it's kind of a worry where I landed as well. Well, I don't want to keep you any longer. This has been an incredible interview, and I really appreciate it and great. So yeah, so we talked about this but if people are listening to this in like, I got a lot of people come on the show. You guys have heard this show before. We got a lot of people come on a lot of people you know want to tell you about their company or whatever.

I don't normally do this, but I'm gonna say this. I think Cole Porter and ballpoint marketing are absolutely two of the leading companies in the field in terms of marketing for Rei a wouldn't say that if I didn't think was true. I think their services. Absolutely fantastic. So if you're listening us you want to check it out. It's not like an affiliate link. I want to do like literally just Google them and find a website. ballpoint marketing.com. Go check them out. They are excellent for both your phone answering and your direct mail marketing needs. Justin Dorsey, CEO and co owner of both those companies. Thank you so much, man, this was I learned a ton. I'm sure everybody got a ton out of it. And I really, really appreciate your time. So thanks for coming on.

29:14 Yeah, thanks for having me, man. Like I said, this was one of my favorite ones I've done so far. So appreciate it was a good time. That is it. That's it for our interview this week. If you could leave us a review wherever you found this podcast that would appreciate it. I read every single one. And I just want to let you know I appreciate you listen to this podcast every week. It really means a lot to me, and I take it very seriously. So thanks again for being here. I'll see you next week.

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